Oh yes.. jpg is a lossy compression format. Now.. if you don't do anything, you will not reduce photo by saving.. however, if you do something...... yes, you degrade the file.

That is a big job... I would charge a few hundred to restore that and it would probably take me about 20 hours of work.

I recommend that you submit it to the folks over at dpreview's restoration forum board and let them give you some advice... some might even buck up to the challenge and try to fix it for you for low cost.

Good Luck!